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Rapid City committee hears update on service-line warranty partnership; members ask how royalties are used
Summary
The Rapid City Public Works Committee received a presentation from Mike Theis on the citys Service Line Warranties of America partnership, including enrollment, claims paid and royalties; members asked whether royalty revenue could be directed to utility assistance for low-income residents.
The Rapid City Public Works Committee on Jan. 13 heard an update from Mike Theis on the citys partnership with Service Line Warranties of America (a HomeServe subsidiary), which offers repair and replacement plans for customers water, sewer and in-home plumbing lines.
Theis told the committee the partner will send mailings to customers next week and described several program metrics and benefits. He said the partner reports 107 Rapid City customers enrolled—about 1,785 service plans in force in the city—595 claims paid since the program launched in 2018 and "a little over $1,000,000" in repair costs covered. The partners customer-service rating, Theis said, is 4.96 out of 5. "It provides a pretty good service for customers that may not otherwise have the financial means to cover things like this," Theis said.
Why it matters: The warranty plans can cover costly, unexpected repairs homeowners might otherwise struggle to afford. The program also pays royalties to the city; Theis reported the partnership has generated about $104,000 in royalties to date and noted those payments go directly into the general fund.
Program details and costs: Theis said the water-line plan covers service from the main to the home, with the presenter stating pricing as "$6 and 70 or $6.75" per month, unlimited service calls and a maximum claim limit of $8,500. A sewer-line plan, he said, is about $7.75 per month with the same claim limit. An interior plumbing and drainage plan that covers in-home piping was described as $9.99 per month with a $3,000 claim limit. Theis emphasized the partner uses local, licensed contractors and offers customer education about what the city does and does not cover.
Member questions and budget implications: Committee member Kevin asked whether the partner products cover septic systems and noted that other utilities, including MDU and Black Hills Energy, send similar solicitations; Theis confirmed the SLWA products cover a utilitys service lines only and that SLWA is a HomeServe subsidiary. Committee member Kelly asked whether royalties are budgeted; staff said royalties are tied to subscriber counts, are not a reliable recurring revenue source and are applied annually to the general fund after the city is notified in January. Kelly suggested the city consider directing those dollars to the utility assistance program for lower-income residents if the royalties are not otherwise allocated.
Chairs note and committee action: The chair said the city already has funds (referred to in the transcript as "CBG") that can be used on a case-by-case basis to repair service lines. After discussion the committee moved, seconded and approved the item by voice vote with no recorded opposition.
Votes at a glance: The committee adopted the meeting agenda, approved consent items 1—6, approved Item 5 (the SLWA update) and then adjourned. The motions were approved by voice vote; specific tallies were not recorded in the transcript.
The meeting adjourned following the vote.
